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Profiles in trust: Part Six

WASHINGTON - When the trust funds litigation in Cobell and other cases are finally resolved, people like lead plaintiff Elouise Cobell, her fellow plaintiffs in the class action lawsuit, a cast of Native American Rights Fund attorneys and other members of the legal team, as well as an honor roll of others will no doubt all wear every feather Native culture can bestow.

Congressional intervention would emphasize the mediation of adversarial differences that have dominated the case so far. By its very nature, and no doubt because of its historic importance, the hearing drew out a distilled record of essential information in the case as the ground beneath it begins to shift. This shift and the information it throws out, the new perspective it generates, leaves some reputations on higher public ground in this regard, and some not.

This multi-part series takes a look at a few who have found higher ground, and one whose reputation as a former Interior Secretary may be settling into lower ground, at least on the subject of the trust funds: Bruce Babbitt.

Jim Parris: Ahead of his time

Several accounts have appeared in praise of Jim Parris' principled refusal to whitewash Interior's trust accounts records, a disaster area the July 30 testimony did little to rehabilitate.

But less known to the public is that Parris has long advocated a comprehensive approach to cleaning up the trust accounts - in briefest terms, an approach that recognizes the full multiplicity of data around trust assets and accounts, and the importance of auditing and reconciling the records regarding the accounts, rather than sampling small data sets as stand-ins for the larger whole. In the later 1990s, Parris worked with First Nations Development Institute to structure basic information that piloted such an approach in isolated cases.

The July 30 hearing left little doubt that a comprehensive, holistic approach to the tribal trust "fix" will be a guiding light of any congressional initiative. The Cobell legal team, represented by Native American Rights Fund executive director John Echohawk, accepted the premise with certain qualifications. In new court filings, Interior too now states that a comprehensive approach is key to a trust fix.

So the position is unanimous among the principals, and Parris has been there all along.

But how long is all along? Even those who have followed the trust funds management reform saga in some detail may be surprised to know that in Parris' case, it stretches all the way back to 1985. Tribal agitation for reform of the trust accounts had only just broken the visibility horizon and begun to get some momentum behind it.

A BIA supervisor assigned the new-hire Parris to review trust accounts. That assignment finished, the same supervisor asked him what should be done.

"Reconcile and audit those accounts."

"We can't afford to do that."

"You can't afford not to. It'll come back to haunt you if you don't."

In retrospect, truer words were never spoken on Indian trust funds.

But before they would be heard, Interior spent three years trying to maneuver out from under its responsibility for the trust accounts - the department "wanted every way in the world" to wash its hands of them, Parris said.

In 1986, Interior drafted Mellon Bank to essentially receive the accounts, the idea being that its private sector trust experts would perform audit and reconciliation functions on them. Indian beneficiaries were consulted slightly if at all. In any case, arcane trust funds issues did not have the profile then that the Cobell litigation has given them now, so that full familiarity with the issues at play here would have required an educational effort that never transpired. The end-run ended when the late Sidney Yates, then-chairman of the Appropriations Committee in the House of Representatives, complying with Indian wishes, inserted language into an Interior appropriations bill to the effect that Interior couldn't contract out the accounts until they were reconciled.

According to Parris, the change of plans led the Interior to stiff Mellon Bank for approximately $500,000 in work already performed. Despite publicity appearances with then-BIA head Ross Swimmer, the bank had not worked out a contract for its services by the time Yates intervened on behalf of Indian trust beneficiaries.

Next the Interior turned to Security Pacific bank for prototypes of trust system software - efforts that didn't work for the Indian trust accounts.

By fiscal year 1988, Interior was ready to listen and Parris directed an audit initiative that went on through fiscal year 1990. In 1991, an effort to reconcile the audited accounts got under way.

But the results of the audits demonstrated the disastrous state of the accounts. The BIA division of accounting management posed this question to Parris: "We wouldn't audit these accounts anymore, would we?"

Parris, a certified public accountant and financial professional, could only respond, "You don't not audit because you got a bad audit."

But at Interior and the BIA, that's what they did.

Over the ensuing few years, Congress would pass the Indian Trust Management Reform Act of 1994. In the process the late congressman, Rep. Mike Synar, a Democrat from Oklahoma, directed the questioning that both exposed Interior's obstructionist stance toward reform - but also put the handwriting on the wall as to Parris' BIA career.

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At a key congressional hearing, Synar questioned a panel of BIA and Interior officials on the probability of a lawsuit such as Cobell soon became. It became clear to observers that the official line was to pooh-pooh the thought of it - an attitude typified by then-BIA chief Ada Deer's "Oh, I hope not."

Synar presented the same question to Parris. Again, truer words were never spoken: "Well, let me put it this way. I wouldn't doubt it one little bit."

Not long afterward, Parris answered a reporter's question on the trust monies due to Indians just as forthrightly. When the Albuquerque Journal reporter pressed to know if the amount might reach the billions of dollars, Parris said the amount "was most certainly in the hundred millions ? I don't know how much more it might be."

Between these two incidents, Parris said, "My name was capital M-U-D."

But when he left government service for a consulting practice shortly afterward, he found that his name was still good with tribes. As a sole practitioner CPA, his current client list includes tribal attorneys on trust cases for the Osage, Warm Springs, Jicarilla, Delaware, Northern Arapaho, Eastern Shoshone, Shoshone-Bannock tribes and Laguna Pueblo, as well as a tribal client unrelated to litigation. He has performed trust-related analysis recently for the Blackfeet and the Nez Perce as well.

When this reporter caught up with him recently, he was anywhere but at home in Rio Rancho, N.M. He was on tribal land, hot on the trail of one of those missing "manual control cards" that often tell the tale of trust account transactions.

If the past is any guide, the odds run high that he'll find it and put it to good use.

Bruce Babbitt: A reputation in trouble

As a presidential candidate, Bruce Babbitt became known for a quick wit that kept reporters in laughs, and came across to the general public more convincingly anyway than his qualifications for national political leadership. After some initial successes in the Democratic presidential primaries, the former Arizona governor withdrew quietly from the race.

Returned to national prominence as President Clinton's Interior Secretary, Babbitt won himself a place in the hearts of many Native people with a series of firm decisions in favor of Interior's management authority over Alaskan waterways on federal land, including Alaska Native dominions. The details are far too complex to rehearse here; suffice to say it was a near thing. Without a champion in Babbitt, it is possible the Alaska Native environment, and with it the so-called subsistence practices of Alaska Native culture, would be under siege to a greater degree than today - which is already quite enough in the view of many Alaska Natives and environmentally minded allies.

So far so good. Then comes a consideration of Babbitt's role in implementing the Indian Trust Funds Management Reform Act of 1994. One can grant him the benefit of the doubt on one point at least: early plans of a leadership core of IIM accountholders did go beyond the intent of Congress and the desire of many tribes. Babbitt had to rein them in, and he did so with the same firmness of decision on display in the showdown over Alaskan waterways.

What happened next in Babbitt's engagement with trust funds reform reflects bad advice, bad judgment, bad politics and bad faith - bad road that keeps spooling out with each new round of testimony, all to the detriment of Babbitt's reputation at its best.

The bad advice came from Indian people in the BIA who got the secretary to sign off on the idea that racism drove the demand for trust funds reform. That is, critics of Interior's track record on trust funds management were animated by the skin color and cultural background of Indian personnel who do the bureau's work these days in large part, not the system they are saddled with or the history of faulty practices they've inherited or the results these produce. This charge stems from back-channel, system-wide campaigns within the BIA, abetted by the occasional ally within Interior, to protect Indian jobs pertaining to the trust funds.

The gambit got its traction in Albuquerque in late 1993. Under the pressure of court proceedings, it would eventually mutate into the out-there assertion that pulling the trust funds from Interior for long enough to accomplish a "fix" would cancel the entire federal trust responsibility toward tribes.

But along the way to that larger argument, an earlier outcome was to convince Babbitt (again not without an assist from Indian leadership within the BIA) that he was protecting Indian jobs with decisions that doomed interdepartmental trust management reform efforts. He didn't act on Special Trustee Paul Homan's assessment of trust-related expertise within Interior and the BIA - such expertise simply wasn't there to the degree needed for reform, "and I mean from top to bottom," Homan told Babbitt to his face, according to court testimony offered by Homan in July.

If Homan is accurate in also stating that difference to be the only material one between he and Babbitt, as he testified, that would suggest Babbitt's hard-line defense of Indian jobs played a role ultimately in Homan's departure, a setback for the 1994 trust management reform law in its entirety.

One may wish to temper criticism of Babbitt on this count of susceptibility to bad advice. Any Interior Secretary is going to act largely on the advice of others when it comes to Indian affairs, after all. He may have thought he was standing up for the worthy cause of Indian jobs and reputations - and he wouldn't have foreseen a Bush administration dedicated to efficiency throughout the federal workforce. In addition, behind all of these extenuating circumstances looms the presence of national politics. With all hands on deck against Republicans following their 1994 insurgency in the House of Representatives, Democrats were not about to be cast as unfriendly to Indians; and Babbitt, as one of the administration's point men for them, wasn't always going to be his own man.

But the bad judgment was Babbitt's own - the importation of trust-fix expertise into the department emerged in the July 30 hearing testimony not as a death knell to Native jobs, but in fact as a way to protect them through capacity-building and experience in new skill sets - "one of the best on the job training opportunities for government officials of all time," in the words of one panelist. But for Babbitt and his advisors, it might have gotten started years ago. And of course, Indian trust beneficiaries might have gotten a taste already of proper services.

The bad politics of Babbitt's trust reform initiatives became obvious earlier this year, when Republican senators announced congressional intervention to settle the Cobell lawsuit. Far from preserving Interior's trust functions against Republicans in the Senate, Babbitt's lines of defense, his stalling "reorganizations" and software follies and the profligate spending associated with it all, have provided a veritable fuel pipeline for powering the Bush administration's efficiency-in-government agenda (officially known as the President's Management Agenda) through Indian country in the form of across-the-board consolidation of Indian departments into larger ones. To put it another way, at the very time that a White House with majority power in the House and Senate is passionate about efficiency in federal spending, Babbitt's legacy has helped make Indian trust management a poster child for inefficient federal spending.

Bad faith? That is a generous assessment of Babbitt's performance before the Senate Committee on Indian Affairs on the subject of TAAMS, the Trust Asset and Accounting Management System. In testimony that seemed unlikely even then, Babbitt hailed TAAMS as a way to fix trust accounting while obviating private sector expertise on a broad scale within Interior, win congressional funding anyway, and appease a court that was breathing down the department's neck over its failure to institute proper reform of its trust funds management systems and practices.

Give him his due - it was a daunting task but he got it done. The court gave Interior some breathing room along with further warnings. Congress ponied up funding for TAAMS and other putative reform measures. Interior won another reprieve from the serious application of private sector expertise to its problems ("not one iota" has been applied to this date, the Senate Committee on Indian Affairs heard July 30).

TAAMS proved a flop in every way. Now it turns out, courtesy of the July 30 hearing, that private sector experts knew all along it would never work, Babbitt's polished outpourings notwithstanding. In the private sector, the TAAMS computer software tracks oil and natural gas assets only. It wasn't designed to manage the other asset classes found in Indian trust accounts, and it wasn't going to do so as Interior proved.

Even some lawmakers who approved funding for TAAMS knew it was tantamount to throwing bad money after good, according to the July 30 record. But they didn't want to play into Babbitt's hands and stand accused of being "against Indians," so they approved the funding of known folly.

Probably not for the last time, either. But at least on Indian trust funds, the next time may be a while in coming.